The Commissioning for Quality and Innovation (CQUIN) framework, used in the acute system this year, allows trusts to withhold 0.5 per cent of the value of a contract if agreed measures of quality and innovation do not improve.

Flora Swanborough, the DoH's CQUIN lead, said the department plans to expand the scheme into other sectors and increase the amount of money that can be held back from providers.

A DoH document published in October, Improving Quality in Primary Care, said that PCTs should consider incorporating the CQUIN framework into enhanced services and out-of-hours services.

NICE's clinical standards were an ideal candidate for CQUIN 'incentives', said Ms Swanborough, speaking at an NHS Confederation conference in London.

According to Audit Commission research presented at the event, 'the threat of losing money may motivate clinicians more than incentives'.

James Peskett, head of health policy at the Audit Commission, told NHS managers that the economics of 'prospect theory' could change the future of performance-related pay in the NHS.

The theory shows that people are more likely to respond to the threat of a small loss in income than the prospect of a gain, until incentives reach a certain size.

GPC deputy chairman Dr Richard Vautrey said he had heard 'chatter' about the use of CQUIN in primary care but had yet to see any detail.

He warned that it was unlikely that practices would want to participate in schemes that involved financial risk.

'Practices are already over-loaded with targets. Practices will always look at the bottom line with a contract like this, and decide whether it is financially viable to strive to achieve these targets, or whether they will actually end up spending more money than it is worth.'